Braxton buys furniture for $2,000 using a credit card with an 18% annual interest rate. If he pays off the purchase over 2 years, and there is no grace period, how much total interest will he pay? Formula: total cost=purchase amount+(purchase amount⋅interest rate)
Answer
A
2 dollars comma 000
B
1 dollars comma 800
C
360 dollars
D
720 dollars
Explanation
The yearly interest is $2,000 × 0.18 = $360. Over 2 years, the total interest is $360 × 2 = $720, so the correct choice is 720 dollars.
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